Cambodian cashew seeks its chemistry: three factories to turn a waste into industrial gold

Long exported raw, Cambodia’s cashew sector is beginning a strategic shift. Three companies are preparing to valorize shell oil — an overlooked byproduct with considerable global outlets.

It took a few decades for Cambodia to begin seeing its cashew shells as more than waste. Three companies — including Japan’s TPJ and two Vietnamese firms that asked to remain anonymous — plan to launch the country’s very first cashew nut shell liquid (CNSL) processing projects by the end of the year, according to the Cashew Producers Association of Cambodia (CAC). A modest-sounding initiative, it could signal a major shift in the sector’s upscaling strategy at a time when the industry already carries significant weight.

A giant still exported too raw

The context is telling. In 2025, Cambodia exported more than one million tonnes of raw cashew nuts, generating over $1.5 billion in revenue — up 27% from 2024. A remarkable performance, but one that masks a structural weakness: due to limited local processing capacity, almost all production is exported, mainly to Vietnam. According to the National Cashew Policy 2022–2027, officially launched by the Ministry of Commerce in 2023, Cambodia aims to process 25% of its production by 2027 and at least 50% by 2032. Yet in 2025, only 22,600 tonnes — about 2.4% of total production — were processed locally.

It is precisely in this context of dependence on raw exports that the three CNSL projects announced by Silot Uon, president of the CAC, make sense. “There are three companies planning CNSL production. One is a Japanese company, TPJ, while the other two are Vietnamese firms that have asked not to be named at this stage,” he said. The plan includes one medium-sized facility and two smaller units. The small plants will use a Japanese two-stage extraction technology, while the larger one will employ a Vietnamese five-stage process.

A global market in strong expansion

CNSL is not an incidental byproduct. This viscous brown-red liquid, contained in the honeycomb structure of the shell, has multiple applications in polymer industries: friction linings, adhesives, coatings, laminated resins, rubber compounding resins, cashew-based cements, PU polymers, surfactants, epoxy resins, foundry chemicals and intermediates for the chemical industry.

The global market is growing fast. Estimated at around $498 million in 2025, it is expected to exceed $1 billion by 2035, with a compound annual growth rate of 7.42%. The momentum is driven by rising demand for green and sustainable materials, which is pushing CNSL use into diverse applications — coatings, adhesives and lubricants — in response to increasing environmental concerns and the search for renewable resources. Industrial-grade uses account for nearly 65% of total consumption across more than 12 major sectors.

Automation and safety: the two drivers of change

CNSL valorization goes hand in hand with a deep modernization of production lines. In fully mechanized facilities, raw cashew nuts pass through steam cooking chambers and automated shelling equipment, enabling shell separation without direct human contact. The health issue is real: CNSL is a potent skin irritant, classified as an occupational hazard in traditional processing plants. “We find that automation improves not only workplace safety but also processing efficiency,” Silot Uon said.

Nearly 30% of regional producers are investing in advanced extraction technologies to improve yields, which currently range between 20 and 25% per tonne of cashew shells. More than 20 new processing installations were established worldwide between 2022 and 2025.

Cambodia racing for added value

For the Cambodian industry, the challenge goes beyond merely extracting a byproduct. It is about breaking away from an economic model in which the country supplies raw material while neighbors — led by Vietnam — capture most of the added value. Vietnam absorbs 60–70% of the world’s processed cashew production and accounts for about 80% of all kernel exports, leaving most other origins tied to Vietnamese FOB prices.

The CAC is already working on commercial link-ups with Chinese and Japanese companies to develop exports of high-value products and processing capacity. The three CNSL projects fit this logic: extract more value from each tonne harvested, diversify sector revenues, and finally begin to build a Cambodian agrochemical industry.

A quiet revolution that starts with a shell. And that could, in time, change Cambodia’s place on the global cashew chessboard.